Indian Businesses Expand Globally
Indian companies are increasingly looking beyond domestic borders to fuel their growth, with a notable surge in outbound acquisitions. This trend, driven by a confluence of factors including a slowdown in domestic investment and a desire for strategic expansion, saw 162 Indian companies spend over $18 billion on outbound acquisitions in 2025, marking a significant 34% increase from the previous year, according to data from consultancy Grant Thornton. Sumeet Abrol, partner and national leader at Grant Thornton, told the BBC, “We could cross $15 billion in deal value in just the first half of this year.” This wave of international deal-making by Indian firms, including high-profile transactions like Sun Pharmaceuticals’ $11.75 billion acquisition of Organon & Co. and Tata Motors’ $4.4 billion purchase of Iveco, echoes past acquisition booms but is underpinned by different motivations.
While the early 2000s saw Indian companies pursuing global assets as symbols of ambition during a roaring domestic bull market, the current landscape is marked by a different economic reality. India is currently grappling with a rapid exodus of foreign portfolio investors, a sharp slowdown in net foreign direct investment, and stubbornly weak private sector investment, despite government incentives like tax cuts and production-linked subsidies. India’s chief economic advisor, V. Anantha Nageswaran, recently highlighted this concern at a policy conference, stating, “Corporate profits [of India’s top 500 companies post-Covid] grew at 30.8% per annum. But still, our overall capital formation rates from the private sector have been disappointing.”
Strategic Motivations for Overseas Expansion
Experts suggest that the current rush to expand overseas, even as the government encourages domestic investment, reflects a growing disaffection with the domestic business environment and a search for better diversification and capability-building opportunities abroad. Saurabh Mukherjea of Marcellus Investment Managers told the BBC that many companies in their portfolio are establishing greenfield factories in locations like the U.S., where industrial land is more accessible and working capital is easier to obtain compared to India. Mukherjea noted that “dozens of smaller Indian companies are making similar greenfield investments or pursuing smaller acquisitions,” beyond high-profile deals like Sun Pharma’s acquisition or tycoon Mukesh Ambani’s reported backing of a $300 billion oil refinery project in Brownsville, which was announced by Donald Trump but not publicly confirmed by the Ambanis.
This trend is further supported by stronger balance sheets and improved access to global financing, according to Neha Singh, co-founder of the data intelligence company Tracxn. Singh explained to the BBC that “Indian companies are increasingly looking overseas to access markets, brands, technology capabilities, R&D expertise, and established distribution networks that may otherwise take years to build organically.” Furthermore, acquisitions are accelerating as companies seek to safeguard their supply chains in an increasingly volatile global environment characterized by chokepoints and weaponized trade tariffs, experts told the BBC.
However, overseas acquisitions are not without risks. Mukherjea pointed to Tata Steel’s purchase of Corus Steel as an example of a deal that became an “albatross” for the company for decades. He also noted that, remarkably, Indian companies still struggle to pay for these deals using shares, with even large all-cash transactions like the Sun Pharma deal posing financial risks. Despite these challenges, the trend of outbound deals is expected to continue, potentially hastened by a spree of free trade agreements between India and countries like the UK, Europe, and Australia. Mukherjea anticipates a “deluge of outbound deals from India as companies head off to invest in the West to build up bases in the years to come.”
An additional factor influencing this trend is the growing preference of next-generation corporate leaders to live and study abroad. This demographic shift logically leads to a desire to hold assets in foreign currency, especially given that the rupee depreciates by approximately 40% against the dollar every decade, Mukherjea added. Meanwhile, Singh advised that the overseas expansion is likely to be accompanied by “selective caution” regarding large domestic investments.
India remains caught in a cycle of weak demand and anemic private investment. This situation has been further exacerbated by a global energy shock and the potential risks posed by agentic AI to its already fragile job market. The overall deal value for outbound acquisitions in 2025 might fall short of last year’s $18 billion figure due to the current “geopolitical air pocket,” according to Abrol of Grant Thornton. Nevertheless, experts believe the long-term trajectory is clear: Indian companies will increasingly hedge against growing economic uncertainties in Asia’s third-largest economy, even as the government strives to curb dollar outflows and attract foreign capital to stimulate domestic growth.
